NEWARK – The Division of Consumer Affairs has mailed letters to all public and private college and university administrators in New Jersey, reminding them that a new state law requires credit card issuers to register with their institution before offering credit cards on campus to students.
The state’s Credit Card Solicitation Act, which took effect this May, also requires credit card issuers to provide an on-campus education program. The program must include an explanation of when any introductory interest rate expires and higher rates begin, how interest on unpaid balances is computed and how long it will take to pay off balances if only minimum monthly payments are made, among other information.
Gifts and other promotional incentives designed to entice students to apply for a credit card are prohibited, under this law.
“Easy credit may sound good to cash-strapped students but the downside can be a deep spiral into a whirlpool of debt, with no easy way out,” said Thomas R. Calcagni, Acting Director of the Division of Consumer Affairs. “This law will help students better understand what they are agreeing to before they sign on the dotted line.”
The Credit Card Solicitation Act also prohibits credit card issuers from taking any debt collection action against the parent or guardian of the student unless he/she has agreed in writing to be liable for the debts of the student.
Credit card issuers who violate provisions of this law are liable for civil penalties between $5,000 and $10,000 for each offense.
Consumers can report any suspected violations of the law to the Division of Consumer Affairs by filing an online complaint at http://www.nj.gov/oag/ca/ocp/ocpform.htm or by calling 1-800-242-5846 (toll-free within N.J.) or 973-504-6200.